Updating the current production line

Assignment Help Operation Management
Reference no: EM131173146

1. A small business company is considering updating the current production line. There are two plans. For plan A, the fixed cost will be $35,000 and the variable cost will be $25 per unit after the update. For plan B, the fixed costs will be $45,000 and the variable cost will be $23 per unit after the update. Please answer the following questions:

(a) Suppose the selling price is $35, what is the break-even volume for each plan? Which plan has a lower break-even volume?

(b) Suppose the selling price is $35. Also, the company aims to achieve a profit of $5,000 after the update. What selling volume will be required to achieve the profit for each plan? Which plan has a lower volume?

2. A service garage uses 1600 boxes of cleaning cloths a year. Ordering cost is $30 and holding cost is $0.6 on an annual basis. Please compute the following tasks using EOQ model.

(a) The economic order quantity based on EOQ model?

(b) The total cost of ordering and carrying

(c) Suppose the current order size is 200. What additional annual cost is the company incurring by staying with the order size 200?

2 Extra Credit

A grocery shop that makes candles offers a scented candle, which can be produced at a rate of 36 boxes per day and used 12 boxes per day. Assume that demand is uniform throughout the year and the shop opens for 360 days. Setup cost is $80 for a run, and holding cost is $2 per box on a yearly basis. Please compute the following tasks using EPQ model:

(a) The economic run size

(b) The maximum inventory

(c) The total cost

Reference no: EM131173146

Define the impact of significant economic expansion

Determine the likely consequences of the introduction of gaming entertainment into your state, or if your state already allows gaming, the impact of significant economic exp

Designing the container for the workstation

Your plant manager has decided to streamline production so as to reduce WIP (Work-in-process) inventory. However she does not want this reduced WIP to cause 'starvation' of wo

The most critical leadership issue facing organizations

What do you think is the one most critical leadership issue facing organizations in the second decade of the 21st century. Why is this issue more critical than any other of t

Define channel conflict

Hypothesize why it is important for leaders both to create and enable chaos as well as a clear sense of purpose in organizations. What are the trends and challenges and key is

Illustrate what other factors are relevant to this issue

Illustrate what o r factors are relevant to this issue. Elucidate how do changes in assumptions mentioned by o r managers affect proposal. Illustrate what position should Jim

Pricing and globalization strategies

From the e-Activity, discuss the best possible pricing strategy based on whether the company you selected is a retailer, manufacturer, or service firm. Explain your rational

Instalment credit is so profitable for the small business

Because instalment credit is so profitable for the small business, most small businesses finance themselves. If a company wants quick acceptance and extensive distribution, wh

The use of artificial intelligence

What are some of the dangers or limitations that you see in the use of artificial intelligence, expert systems and virtual reality technologies? Provide citations and referenc

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd